Saturday, February 18, 2012

Chart of the Day: Drill, Drill, Drill = Jobs, Jobs, Jobs

While the overall economy struggles to create jobs during another "jobless recovery," it's been a much rosier employment picture in one of America's most successful "shovel-ready" job-creating industries: Oil and Gas Extraction.

The chart above displays the monthly percentage changes in employment levels since January 2007 for oil and gas extraction jobs compared to total nonfarm payroll jobs. As of January 2012, payroll employment is 3.3%, and 4.7 million jobs, below the month of January five years ago. In contrast, the explosion of new oil and gas jobs has increased employment in that industry by about 1/3 since January 2007. Over the last 12 months, oil and gas companies have added 23,200 new workers, at a rate of almost 100 new hires every business day.

The wind power industry is predicting massive layoffs and stalled or abandoned projects after a deal to renew a tax credit failed Thursday in Washington ... Wind proponents tried to tuck the tax credit extension, which provides an income tax credit of 2.2 cents per kilowatt-hour for the production of electricity from wind turbines, in legislation aimed at extending payroll tax cuts. But congressional leaders did not include it in that bill ... Contributing to the bleak outlook for 2013: competition from cheap natural gas and anemic demand for power as the economy struggles to pick up steam ... Navigant Consulting expects 37,000 industry jobs to be eliminated within the year. -- Chicago Tribune

one thing about natgas.. you can ramp up or ramp down electric generation relatively fast as compared to coal/nuke.

that makes it a perfect match for wind/solar, eh?

No, it is not a perfect match. Using a product that is being produced at a loss to offset the use of a product that needs massive public subsidies is not a good idea.

The shale gas producers will be going bankrupt as financing for money losing production dries up. And once subsidies are cut the capital destroying wind and solar spending will be reduced sharply. What the US needs are more cheap coal plants.

"one thing about natgas.. you can ramp up or ramp down electric generation relatively fast as compared to coal/nuke."

larry, you are badly misinformed on that.

you cannot ramp up nat gas that quickly. the big, efficient plants can take days to warm up.

you may be thinking of some of the small ones that are used for surge needs that can be spun up quickly, but they produce electricity at 10X the price and are not something you would ever want to use as baseline.

i have looked at some firms that run such plants and just play that arb, putting power onto the grid only during brief price spikes, but you could never use it for baseline, it's MUCH too expensive, so no, it cannot be used to smooth out wind/solar.

I think the difference between the "peaker plants" and conventional baseline is that the "peakers" are gas turbines while the conventional plants are high pressure steam. It does make sense to convert but coal will compete for the forseeable future.

I think the difference between the "peaker plants" and conventional baseline is that the "peakers" are gas turbines while the conventional plants are high pressure steam. It does make sense to convert but coal will compete for the forseeable future.

Actually, it makes no sense at all. The US is incapable of producing enough cheap natural gas at a profit to replace coal.